To achieve this noble vision, the Minister and participating private sector companies established a Social Compact Forum and the Public Health Enhancement Fund (PHEF).
The Social Compact Forum which will interact with the Minister and the Public Health Enhancement Fund (PHEF) is a financing instrument established by the Social Compact.
Two structures have been created. The first is a Social Compact Forum that will interact with the Minister of Health. The second is the Public Health Enhancement Fund (PHEF). A board will be responsible for the overall direction and stewardship of the fund.
The Forum constitutes the CEOs of the participating companies. The Forum will allow the private health sector to engage with and to strategically support the Minister with initiatives that:
- Address the challenges facing the health sector, to the collective benefit of the health of all South Africans
- Pursue shared goals by ensuring higher levels of cooperation and collaborative action
- Share from lessons learnt, to better position the health sector to confront current and future challenges
- Forge strong partnerships between government and the private health sector
- Participate in critical policy debates that will strengthen the health sector
The Forum will meet with the Minister of Health at least two times a year, wherein the focus will be on:
- Report back on progress of initiatives agreed to by the Minister and Social Compact Forum
- Discussion on new areas of cooperation and support
Facilitation of the development of a common vision of the healthcare sector as a whole, including the creation of an enabling environment to achieve that vision.
The Public Health Enhancement Fund (PHEF)
The Public Health Enhancement Fund (PHEF) will be managed by the private sector through the establishment of a not for profit entity in accordance with the Companies Act.
Collection and disbursement of funds will be for the benefit of transformative healthcare projects, to be jointly agreed to between the Minister and the private sector. Payments from the fund will be made directly to vendors or, in the case of projects, to the providers of services to the beneficiaries of the projects, as determined by the Board of the PHEF from time to time.
The rationale for the fund is for private sectors to contribute in strengthening the health sector and to build trust between the public and private sector. The initiative also aims to leverage the funds within the private sector to maximise benefits for the types of projects envisaged, rather than adopting an individual or silo approach, resulting in a number of fragmented, smaller projects, which do not necessarily have the impact that is required.
Ultimately, it is envisaged that this institutionalised engagement will assist in shaping a better future healthcare system for all, regardless of whether they be from the private or public health sector.
The funding formula has been developed by corporate lawyers, auditors and BBBEE consultants to ensure that the contributions into the fund are recognised under the Socio-Economic Development (SED) element of the BBBEE balanced scorecard. Empowerdex has confirmed this. The BBBEE Act and its balanced scorecard require companies to spend 1% of Net Profit after tax (NPAT) for maximal SED recognition.
The funding formula for the PHEF requires 0,75% for participation in the fund. This means that participants would contribute 75% of their required SED obligation into the fund.
Participation in the initiative comes at no additional cost or earnings dilution, unless companies decide to exceed the 1% NPAT scorecard requirement. Contributing companies stand to benefit from an institutionalised engagement with government, through less fragmentation of SED activities and more efficient channelling of resources.